Effective Leadership Differs Between Organizations: A Comparative Study of US and German Multinational Corporations in South Korea

Abstract

Effectively implementing leadership is critical for organizational success. In consideration of this issue, this study investigated effective leadership in US- and Germany-based multinational companies (MNCs) operating in South Korea. Drawing on transformational leadership (TL) theory and leadership contingency theory, the study clarified the contextual dependency of TL effectiveness. A survey was administered to 258 employees of the target MNCs, during which the participants were asked to rate their supervisors’ transformational leadership behaviors. The responses were empirically analyzed on the basis of the research framework. The findings showed that a leader’s group-focused TL behaviors indirectly influenced organizational commitment and that this relationship was mediated by psychological empowerment in the US-based MNCs. Conversely, a leader’s individual-focused TL behaviors demonstrated a pronounced effect on organizational commitment and that this association was also mediated by psychological empowerment in the Germany-based MNCs. The leadership behaviors that effectively empowered employees and increased their organizational commitment differed depending on the cultures prevalent in the organizations’ countries of origin. Adopting the two-dimensional model of TL, this study confirmed the contextual dependency of TL behaviors and suggested the need to incorporate an organization’s cultural context into predictions regarding the effects of certain leadership behaviors.